THE National Assembly Standing Committee on Ports and Shipping has unanimously passed the Carriage of Goods by Sea Bill 2011 to be presented before the National Assembly for further legislation and house vote. The proponents/lobbyists behind the Bill claim that this was a necessity as the time had come to update/replace British era laws and bring them at par with international best practices.

It is unquestionable that archaic laws need to be amended in due course to bring them in line with the changing requirements of the world. However, when one embarks on such a task, it should be done keeping in mind not only the prevailing international practices but also its economic and commercial viability and policies.

In my opinion the Bill favours the first world ship-owning nations and their P&I Clubs rather than our own mercantile/business community. The Hague Visby Rules 1968 (as amended by SDR Protocol of 1979) and the UN Convention on the Carriage of Goods by Sea 1978 (informally known as the Hamburg Rules) are the principal international conventions dealing with laws in respect of carriage of goods by sea.

The objective of Hague Visby Rules was to protect shippers/cargo owners from widespread exclusion of liability by sea carriers/ship owners. The 1968 rules, however, failed to displace the upper hand the carriers historically held against the cargo owners. As a consequence, the Hamburg Rules were incorporated: the driving force behind the convention was an attempt by the developing countries to level the playing field vis-a-vis the shift of power between the shipper/cargo owners and the ship owner/carriers.

Over the years majority of the developed nations chose to ratify the Hague Visby Rules as these still gave the carrier some sort of stronghold over the shipper/cargo owners, upon the advent of Hamburg Rules, majority of the African/Middle Eastern nations switched to the Hamburg Rules in order to give themselves an added level of comfort in dealing with the shipowners/carriers. Over 34 countries have ratified the Hamburg Rules as of current records.

Pakistan was not a signatory to either one of the international conventions. Being a developing nation, the majority of the trade conducted to and from Pakistan is on board foreign-owned vessels.

According to a Unescap report published in 2001, due to a scarcity of Pakistani flagged vessels, Pakistan cargo owners (importers and exporters) had to rely heavily on private international shipping companies which are now handling 95 per cent of Pakistan’s seaborne trade. Furthermore, the total volume of goods transported on Pakistani flagged vessel only accounted for five per cent of the total trade.

If a change had to be brought, it should have been brought for the betterment of the mercantile/business community of this country rather than for the ship-owning first world. The proposed Carriage of Goods by Sea Bill 2011 has been drafted along the lines of the Hague Visby Rules which as discussed are still biased in favour of the carriers/ship owners whereas it is the Hamburg Rules that should have been made a benchmark.

Moreover, after considering suggestions from lawyers representing shipowners, their P&I Clubs and freight forwarders have altogether amended the Hague Visby Rules and, as a result, further tightened the noose around the neck of cargo owners by imposing conditions stricter than already prescribed under the Hague Visby Rules, and regressing to the times pre-dating the conventions itself. If one were to speak to any active trader/merchant who regularly deals with shipping companies, one would find out that at several occasions they have found themselves to be a victim at the hands of the shipping companies.

If the legislators have finally pulled up their sleeves and decided to make good of their time, we urge the legislature to adopt the Hamburg Rules as the same would ensure due protection of the cargo owners or in the alternative the Hague Visby Rules in its original form rather than approving the so-called amendments suggested by individuals who appear to be more loyal than the king.

MAZHAR IMTIAZ LARIKarachi